HEXCEL CORP /DE/

Previous wording

The following table summarizes net sales to third-party customers by segment and end market for the quarters ended March 31, 2025 and 2024:

Current wording

The following table summarizes net sales to third-party customers by segment and end market for the quarters and six months ended June 30, 2025 and 2024:

Previous wording

Engineered Products: For the first quarter of 2025, net sales of $91.2 million decreased $1.6 million or 1.7% as compared to the prior year quarter. The decline was driven by lower Commercial Aerospace sales, which decreased $9.5 million or 19.9% in the first quarter of 2025 as compared to the same period in 2024, partially offset by higher Defense, Space & Other sales of $7.9 million, or 17.6%.

Current wording

Engineered Products: For the second quarter of 2025, net sales of $96.7 million increased $4.9 million or 5.3% as compared to the prior year quarter driven by growth in defense and space programs. Net sales of $187.9 million for the first six months of 2025 increased 1.8%compared to the same period last year.

Previous wording

Beginning with the first quarter of 2025, sales are being reported for two markets, including Commercial Aerospace, unchanged from past practice, and a new sales category titled Defense, Space & Other, which combines the previous Space & Defense market and Industrial market. Prior period sales amounts have been reclassified for comparative purposes.

Current wording

Beginning with the first quarter of 2025, sales are being reported for two markets, Commercial Aerospace, unchanged from past practice, and a new sales category titled Defense, Space & Other, which combines the previous Space & Defense market and the Industrial market. Prior period sales amounts have been reclassified for comparative purposes.

Previous wording

Selling, general and administrative expenses were lower for the three months ended March 31, 2025 compared to the same period in 2024 primarily due to lower employee-related expenses. Research and technology expenses for the quarter ended March 31, 2025 decreased when compared to the prior year period primarily due to lower material and supplies and employee-related expenses.

Current wording

Selling, general and administrative expenses were higher for the second quarter of 2025 as compared to the prior year period primarily due to higher professional fees. Selling, general and administrative expenses were lower for the first six months of 2025 as compared to the same period of 2024 as lower employee-related costs more than offset the increase in professional fees. Research and technology expenses for the second quarter and first six months of 2025 decreased $0.4 million and $1.7 million, respectively, compared to the same periods of 2024. The decreases in both periods were due primarily to lower material and supplies expenses.

Previous wording

Net interest expense for the first quarter ended March 31, 2025 was higher compared to the first quarter of 2024 due to higher average borrowings and interest rates.

Current wording

Interest expense for both the quarter and six months ended June 30, 2025 was higher compared to the prior year periods due to higher average debt levels.

Previous wording

Liquidity: Cash on hand at March 31, 2025 was $89.2 million as compared to $125.4 million at December 31, 2024. As of March 31, 2025, total debt was $787.2 million as compared to $700.7 million at December 31, 2024.

Current wording

Liquidity: Cash on hand at June 30, 2025 was $77.2 million as compared to $125.4 million at December 31, 2024. As of June 30, 2025, total debt was $827.7 million as compared to $700.7 million at December 31, 2024.

Previous wording

Under the Facility, total borrowings at March 31, 2025 were $90.0 million, which approximates fair value. The Credit Agreement permits us to issue letters of credit up to an aggregate amount of $50.0 million. As of March 31, 2025, there were no issued letters of credit under the Facility, resulting in undrawn availability under the Facility of $660.0 million. The weighted average interest rate for the Facility was 5.7% for the three months ended March 31, 2025.

Current wording

Under the Facility, total borrowings at June 30, 2025 were $130.0 million, which approximated fair value. The Credit agreement permits us to issue letters of credit up to an aggregate amount of $50.0 million. As of June 30, 2025, there were no issued letters of credit under the Facility, resulting in undrawn availability under the Facility of $620 million. The weighted average interest rate for the Facility was 5.6% for the six months ended June 30, 2025.

Previous wording

We expect to meet our short-term liquidity requirements (including capital expenditures) through net cash from operating activities, cash on hand and the Facility. As of March 31, 2025, long-term liquidity requirements consisted primarily of obligations under our long-term debt obligations. We do not have any significant required debt repayments until February 2027 when our 3.95% Senior Unsecured Notes are due. For further information regarding debt, including our Facility, see Note 5, Debt, to the accompanying condensed consolidated financial statements of this Form 10-Q.

Current wording

We expect to meet our short-term liquidity requirements (including capital expenditures) through net cash from operating activities, cash on hand and the Facility. As of June 30, 2025, long-term liquidity requirements consist primarily of obligations under our long-term debt obligations. We do not have any significant required debt repayments until February 2027 when our 3.95% Senior Unsecured Notes are due. For further information regarding debt, including our Facility, see Note 5, Debt, to the accompanying condensed consolidated financial statements of this Form 10-Q.

Previous wording

The remaining authorization under the Share Repurchase Program at March 31, 2025 was $184.5 million. On April 21, 2025, our Board of Directors declared a quarterly dividend of $0.17 per share payable to stockholders of record as of May 2, 2025, with a payment date of May 9, 2025.

Current wording

The remaining authorization under the 2024 Share Repurchase Plan at June 30, 2025 was $134.0 million. On July 24, 2025, our Board of Directors declared a quarterly dividend of $0.17 per share payable to stockholders of record as of August 8, 2025, with a payment date of August 15, 2025.

Previous wording

Operating Activities: Net cash used for operating activities for the first three months of 2025 was $28.5 million compared to $7.0 million for the same period last year. Working capital was a cash use of $97.7 million for the first three months of 2025 compared to a use of $84.5 million in the same period in 2024. The higher working capital use in the current year was primarily driven by higher payments of accounts due.

Current wording

Operating Activities: Net cash used for operating activities for the first six months of 2025 was $5.2 million compared to cash provided of $37.2 million for the same period last year. Working capital was a cash use of $124.5 million for the first six months of 2025 as compared to a use of $118.3 million in the same period in 2024. The increased working capital use in 2025 was driven by higher payments of accounts payable.

Previous wording

Investing Activities: Net cash used for investing activities was $27.2 million and $28.7 million in the first three months of 2025 and 2024, respectively. Payments on the previously announced divestiture of the Hartford facility were $1.1 million in the first three months of 2025.

Current wording

Investing Activities: Net cash used for investing activities was $42.5 million and $51.6 million in the first six months of 2025 and 2024, respectively. Capital expenditures for the first six months of 2025 were $41.4 million as compared to $51.6 million for the same period last year. Payments related to the divestiture of the Hartford facility were $1.1 million in the first six months of 2025.

Previous wording

Financing Activities: Net cash provided by financing activities was $18.2 million for first three months of 2025 compared to net cash used of $104.3 million in the same period in 2024. Borrowings under the Facility during the first quarter of 2025 were $90.0 million compared to $15.0 million in borrowings for the same period in 2024. Quarterly dividend payments to shareholders were $13.8 million during the first quarter of 2025 compared to $12.6 million in the first quarter of 2024. Share repurchases for the quarter ended March 31, 2025 totaled $50.4 million as compared to $100.7 million in the first quarter of 2024. During the three months ended March 31, 2025, financing fees paid related to the issuance of the 5.875% Senior Unsecured Notes due in 2035 were $3.9 million.

Current wording

Financing Activities: Net cash used for financing activities was $4.1 million for first six months of 2025 compared to net cash used of $136.0 million in the same period in 2024. Borrowings under the Facility during the first six months of 2025 were $160.0 million compared to $95.0 million in the prior year period. Repayments during the first six months of 2025 were $30.0 million. Quarterly dividend payments to shareholders were $27.5 million during the first six months of 2025 compared to $25.0 million in the prior year period. During the six months ended June 30, 2025, repurchases of common stock totaled $100.9 million compared to $201.8 million in the same period in 2024.

Previous wording

Financial Obligations and Commitments: The next significant scheduled debt maturity will not occur until 2027, when the 3.95% Senior Unsecured Notes mature. Certain sales and administrative offices, data processing equipment, vehicles and manufacturing equipment, and facilities are leased under operating leases.

Current wording

Financial Obligations and Commitments: The next significant scheduled debt maturity will not occur until 2027, when the 3.95% Senior Unsecured Notes mature. Certain sales and administrative offices, data processing equipment and manufacturing facilities are leased under operating leases.

Previous wording

The Company uses non-GAAP financial measures, including sales and expenses measured in constant dollars (prior year sales and expenses measured at current year exchange rates); operating income, net income and earnings per share adjusted for items included in operating expense and non-operating expenses; and free cash flow. Management believes these non-GAAP measures are meaningful to investors because they provide a view of Hexcel with respect to ongoing operating results and comparisons to prior periods. These adjustments can represent significant charges or credits that we believe are important to an understanding of Hexcel’s overall operating results in the periods presented. Such non-GAAP measures are not determined in accordance with generally accepted accounting principles and should not be viewed in isolation or as an alternative to or substitutes for GAAP measures of performance. Our calculation of these measures may not be comparable to similarly titled measures used by other companies, and the measures exclude financial information that some may consider important in evaluating our performance. Reconciliations to adjusted operating income, adjusted net income, adjusted diluted net income per share and free cash flow are provided below.

Current wording

The Company uses non-GAAP financial measures, including sales and expenses measured in constant dollars (prior year sales and expenses measured at current year exchange rates); operating income, net income and diluted earnings per share adjusted for items included in operating expense and non-operating expenses; and free cash flow. Management believes these non-GAAP measures are meaningful to investors because they provide a view of Hexcel with respect to ongoing operating results and comparisons to prior periods. These adjustments can represent significant charges or credits that we believe are important to an understanding of Hexcel’s overall operating results in the periods presented. Such non-GAAP measures are not determined in accordance with generally accepted accounting principles and should not be viewed in isolation or as an alternative to or substitutes for GAAP measures of performance. Our calculation of these measures may not be comparable to similarly titled measures used by other companies, and the measures exclude financial information that some may consider important in evaluating our performance. Reconciliations to adjusted operating income, adjusted net income, adjusted diluted net income per share and free cash flow are provided below.

Previous wording

The quarter ended March 31, 2025 included a loss of $1.1 million for the previously announced divestiture of the Hartford, Connecticut business. The quarter ended March 31, 2024 included restructuring costs.

Current wording

The quarter and six months ended June 30, 2025 included restructuring charges of $24.2 million related to the closure of our Welkenraedt facility in Belgium. The six months ended June 30, 2025 also included a loss of $1.1 million for the divestiture of the Hartford, Connecticut business. Amounts for the quarter and six months ended 2024 included restructuring costs.

Previous wording

The quarter ended March 31, 2025 included debt extinguishment costs.

Current wording

The quarter and six months ended June 30, 2025 included a gain of $0.9 million related to a lump-sum pension settlement. The six months ended June 30, 2025 also included debt extinguishment costs.